Yes AAA support = 3rd party.

Because alot of those indie games could be run on a toaster if needed.
Hell they could have just kept the Wii or Wii U then, those systems are plenty powerfull enough for small 2D indie games.

So I honestly dont agree with this.
AAA support is 3rd party support, and their also usually big sellers, while alot of those 2D small indie games barely sell anything (I know there are exceptions).

But there have been "some" AAA support for the Switch so far, like Wolften Stein, Doom ect..... that stops once the PS5 & XB2 launchs imo.
Switch might still get old PS4/XB1 ports but I assume at that point, you ll also see alot less of those types happend.

Old Retro collections belong with the 2D low budget indie games, those will probably keep coming.

Sure, they promoted more power. But they largely sold because it was a new generation. PS4 also got a head-start thanks to Sony Capitalizing on Microsoft's draconian proposals and Nintendo's incompetence. Sony made a lot of smart decisions with the PS4, but let's be honest, their current leadership was practically given to them on a silver platter. Like I said, there is an audience for the Pro and X don't get me wrong, but it's not one big enough to replace the already perfectly fine base consoles for most consumers.

And Like I mentioned, there's always room for improvement regarding graphics technology and power, but the differences are becoming less substantial going into each new generation, and while you're correct that early Xbox 360 games look night and day compared to the Xbox One, the differences start becoming less apparent the further you go into the generation. Many late-gen PS3 and 360 games don't look that much worse than current gen games, even 5 years into 8th generation. A lot of PS3 and 360 games from about 2009 onward can still look good on current gen hardware with a few improvements. It's a big reason why the PS3 and 360 lasted so long in terms of support, and its also a big reason why publishers still keep re-releasing games from that era.

7th generation was the point where older graphics started becoming good enough for a lot of people, and if you think that generation lasted too long, current generation is likely to last even longer. Next gen consoles always bring better graphics and technology, and I'd be lying if I said those still aren't exciting because its always good to see ambitious game developers show that off. But we now at a point where consumers and developers no longer need to shuffle over to the next generation immediately as games on older or less powerful hardware are still perfectly playable. I again point to the PS3 and 360 where even in 2015, those consoles were still regularly receiving great AAA and indie games, and while everyone fully moved on by the following year, they're still getting annual Sports games and just dance until probably next year. Current generation will be even longer lasting since all the consoles are incredibly easy to develop for now that they'll continue to get a lot of great games until there's no longer a market for them.

Next generation isn't going to mean much. AAA games are already expensive and time consuming to make now, it'll get even worse going into next generation. This entire generation, publishers and developers have been relying on cheaper to produce products like Remasters and service titles to fill the gaps. Switch is already getting plenty of those, on top of indie games, exclusives, and mid-budget and Japanese titles from the other consoles. Switch was never going to go toe-to-toe with the other two systems, so I don't know why you were expecting otherwise. 

For Nintendo's system sellers, it's true most of them are out now. But they don't stop existing once they release. They're still strong enough to sell consoles even years after they launch. Plus, Nintendo can always move forward with new IPs, and other sequels to add to that list. Just because we got most of Nintendo's staples this early, doesn't mean the well has run dry. There's always plenty to do in game development. 

Portability worn't loose appeal either. It's not like Motion Controls for the Wii which can only be the selling point for so long, people will always want a device with games that sits between small phone apps and big console experiences. The Switch fills that gap expertly, and unless a direct rival pops up and steals its thunder, that appeal won't die anytime soon. 

And the entire new generation was marketed based on improvements in areas such as graphics.
Otherwise there is no need for a new generation.

I am not denying that Microsoft stuffed up in other areas, higher price, kinect, always-online didn't help matters... But the fact that Sony offered better graphics out of the box on top of it is one of many reasons why the Playstation 4 took a commanding lead.

Not a fair comparison.
You don't compare a late generation title against an early generation next-generation title... Otherwise the Xbox and Xbox 360's differences look almost inconsequential.
You compare differences at similar points in a consoles release cycle.

7th generation did last to long, stagnated technology for to long... And this generation I agree will likely be just as long, if not longer, which is incredibly saddening.

...But, guess what? The next generation consoles will be betting on power as a vital selling point, just like every console generation with the exception of Nintendo's efforts.

New generations are always important. As I said, there's always room for improvement. I agree that power did play a part in the successful launch of the PS4, but it wasn't the only factor. Smart marketing, key properties, and an attractive price point, all while being really the only next gen console worth buying made the PS4 a success at launch.

I made that late gen comparison to show how 7th generation was a turning point. Yeah, it might not make sense to say that games very early in the generation don't look much better than current gen. But even this late into current gen consoles, the difference in graphics isn't as big of a leap as the past. Like I said, 8th gen's more of a sizable bunny hop than a major leap. The main improvements made all have to do with consoles switching to PC based hardware and development philosophies, so even last gen games can be touched up to be presentable on current gen systems.

Next generation will be a similar, if not smaller leap in technology, Even then, very few games will really need that much power, especially as AAA game development costs continue to rise. Next gen consoles won't be failures, far from it. The novelty of a new generation promising new technology will always lead to successful launches. But many gamers and developers will still be fine with making and playing games on PS4 and Xbox One for quite a while afterward as well.

Great.
So we have established that the Playstation 4 originally sold on the premise of:
* More power.

The Playstation 4 Pro is essentially sold on the premise of:
* More power.

Ergo, power is an essential selling point to a large swathe of gamers who desire better fidelity, happy we can agree.

I disagree, the jump in geometric and lighting complexity is rather impressive.

2011 is roughly the year that you would compare Xbox 360 game releases to releases today on the Xbox One.
And that is also the year of Battlefield 3, Gears of War 3, Halo: Anniversary. - Compare that to titles coming out today and the difference can be rather startling.

Now I don't know about you... But running Battlefield 3 on the Xbox 360 makes me want to poke my eyes out with a fork, where-as Battlefield 5 on my Xbox One X or PC looks like to be in another league entirely... The fact it's not running at 720P is a massive massive advantage that improves clarity.

Development costs do continue to rise... But so do profits.
More power doesn't automatically equate to larger development costs anyway, some improvements in graphics actually reduces development time.

For example, having dynamic lighting in-engine takes far less time than designing all the individual textures with baked lighting details in it, which was a common practice during the 7th gen due to lack of power.

I personally have no issue with higher development costs anyway... That isn't really our problem, they can simply make games with smaller budgets.

Nintendo devices primarily succeed with 1st party content but also relies on 3rd party content. Such as the family friendly stuff like Crash, Lego games, etc. Also, many Japanese studios play a big role in Nintendo portables thriving in Japan.

I argue PC, Xbox and PlayStation primarily share the mainstream audience.

To an extent, yes. However, my point is that power is no longer the sole aspect consoles can sell themselves on. PS4 sold well because it had a ton of other selling points that mattered far more than just how powerful it was (which BTW, for being the most powerful system at the time, the PS4 really wasn't that powerful. It was just playing catch up to what PCs were doing for a few years by that point).

PS4 Pro sold itself on better visuals alone, and yet the base system still regularly outsells it by quite a margin. Granted, the Pro was always meant to be a niche product, but it still proves my point that you can no longer use power as the sole, or even the main selling point anymore. Yeah, that stuff is important still, but increasingly less now due to diminishing returns. 

I agree that this gen was a noticeable step up from previous generation, I never said it was a small bump. However, the improvements weren't as significant as past gens IMO. The biggest things that improved was better lighting, facial expressions/textures, and more detailed open worlds. While several current gen games are made better by more powerful hardware, most of the improvements can again, be traced back to finally having adequate RAM and CPUs that aren't heavily customized garbage. I've seen footage of Battlefield 3 vs Battlefield 1 and yes, it looks noticeably better, but not by a massive margin. Keep in mind, I've never cared about the subtle nuances of graphics to begin with, so things like resolution, textures, etc might be noticeable to a more hardcore gamer, but to someone who doesn't care about that, they probably won't notice a difference.

I especially agree with this. I don't think games in general are harder to make now. If anything, they're actually easier to make than ever these days thanks to simple hardware and wide engine support for all consoles. I think gamers really overestimate how expensive game development generally is today. That said, I was specifically referring to AAA game development, which continues to rise due to ever increasing audience expectations for these games. We're seeing AAA games take longer to make now because of that.

For your lighting example, I certainly agree with you that new rendering tools and techniques can help with development, especially for smaller developers. But I'd say that has more to do with the architecture and engine support of today's console than RAW power. Simply because it's easier to employ these graphical techniques on hardware your already familiar with vs some heavily customized processor that makes doing those same tricks just as time consuming as the old fashioned way.